STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
FLORIDA PSYCHIATRIC CENTERS, ) and FLORIDA MEDICAL CENTER, )
)
Petitioners, )
and )
)
COMMUNITY PSYCHIATRIC CENTERS ) CASE NOS. 84-0411 & OF FLORIDA, INC. d/b/a ) 84-0612
CPC FT. LAUDERDALE HOSPITAL, )
)
Intervenor, )
)
vs. )
)
DEPARTMENT OF HEALTH AND ) REHABILITATIVE SERVICES, and ) CHARTER MEDICAL-FT. LAUDERDALE, ) INC., )
)
Respondents. )
)
RECOMMENDED ORDER
Pursuant to notice, a final hearing was conducted in these cases before Michael M. Parrish, a duly designated Hearing Officer of the Division of Administrative Hearings, on August 15, 16, 17, 20, and 21, 1984, in Ft.
Lauderdale, Florida, and on August 24, 1984, in Tallahassee, Florida. Appearances for the parties at the hearing were as follows:
APPEARANCES
For Petitioner: Kenneth G. Oertel, Esquire Florida Psychiatric 646 Lewis State Bank Building Centers ("FPC") Tallahassee, Florida 32301
For Petitioner: Eric B. Tilton, Esquire Florida Medical 702 Lewis State Bank Building Center ("FMC") Tallahassee, Florida 32301
For Intervenor: Morgan L. Staines, Esquire and Community Mary Ann Presswood, Esquire
Psychiatric 2204 East 4th Street
Centers of Florida, Santa Ana, California 92705
Inc. ("CPC")
For the DHRS: James M. Barclay, Esquire
1317 Winewood Boulevard
Building 2, Room 256
Tallahassee, Florida 32301
For Respondent: Glen A. Reed, Esquire
Charter and Richard L. Shackelford, Esquire 2200 First Atlanta Tower
Atlanta, Georgia 30383 and
Cynthia S. Tunnicliff, Esquire,
410 Lewis State Bank Building Tallahassee, Florida 32301
INTRODUCTION
This is a certificate of need case in which the DHRS proposes to award a certificate of need for a child and adolescent psychiatric and substance abuse hospital to be located in Broward County. Charter received preliminary approval for 16 short-term psychiatric beds, 26 long-term psychiatric beds, and 16 long- term substance abuse beds, for a total of 60 beds. The general positions of the parties at the hearing may be described as follows:
DHRS: DHRS believes that the Charter application is consistent with those Certificate of Need review criteria necessary for the approval of its application. The position of DHRS is set forth in the State Agency Action Report and granting letter which accompanied the Certificate of Need issued to Charter, as more currently confirmed.
Charter: Charter's position is that DHRS correctly determined that Charter's application satisfies those Certificate of Need review criteria necessary for the approval of its application. The Charter proposal will be a quality facility and its proposed child and adolescent psychiatric and substance abuse beds are greatly needed in Broward County.
FPC: FPC is an applicant for a freestanding short-term psychiatric and substance abuse hospital for Broward County. If FPC receives its CON, Charter should not be issued its CON, as the applications are, in part, mutually exclusive. FPC objects to being required to go to hearing on Charter's application before a Final Order is given on FPC's application. This may cause a violation of Chapter 381 in that it may cause an overbedding in Broward County.
The DHRS report on Charter's application is flawed. It contains erroneous data on the number of long-term and short-term beds in Broward County. The accurate numbers indicate that there are considerable resources in Broward County for long-term treatment of children and adolescents in psychiatry and substance abuse.
DHRS has no discernible methodology evident in its rules for long-term hospital beds, therefore, its proposed action is arbitrary. No rational basis is evident from the State Action Report that demonstrates a need for the facility proposed by Charter.
Charter's staffing is underestimated, its facility is not financially feasible as there is insufficient demand or need for this proposal. Existing and proposed hospitals can meet any additional need for the planning horizon.
Charter's application indicates it will be no different from existing facilities which are considered short-term. Charter should have its entire application reviewed under the rules for short-term beds. DHRS' preliminary approval is for beds that Charter has not applied for; the State Agency Action Report does not accurately respond to Charter's application.
The application pretends to be for a mostly long-term facility, but in reality this will be a short-term hospital.
The design is inadequate. Children and adolescents, particularly homicidal young persons, as will be admitted, should not be in a hospital designed like this one, and should not be in an urban location. Acceptable zoning for this site is not demonstrated by Charter.
There are many more hospitals in a two hour travel time radius from the proposed site, than are shown in the application or the State Action Report, that can and do treat the types of patients proposed to be admitted to Charter's hospital.
FMC and CPC: FMC and CPC essentially adopt FPC's position in opposition to the Charter application.
FINDINGS OF FACT
Based on the admissions and stipulations of the parties, on the exhibits received in evidence, and on the testimony of the witnesses at the hearing, the following facts are found.
Admitted facts
The Charter facility will have a total of 60 beds and was preliminarily approved by DHRS for the following units: (a) 16 short-term adolescent psychiatric beds; (b) 16 long-term adolescent psychiatric beds; (c) 12 long-term child psychiatric beds; and (d) 16 long-term adolescent substance abuse beds.
DHRS preliminarily approved a total project cost of $7,376,843 on December 2, 1983. As part of its decision, DHRS imposed as a condition and Charter agrees to dedicate 5 percent of its patient days and revenue to Baker Act patients.
The Bureau of Economic and Business Research ("BEBR") population projections for Broward County for 1988 is 1,252,660.
Management personnel and funds for capital and operating expenditures are reasonably available to Charter for its proposed facility.
The Charter facility will be geographically accessible to all residents of Broward County.
Findings related to the application process
Charter filed its application on August 15, 1983, and it was assigned to Mr. Straughn for review. On August 29, 1983, Mr. Straughn sent an "omissions" letter to Charter requesting additional information. On October 13, 1983, Charter sent a response to the "omissions" letter providing Mr. Straughn with additional information about the application.
Charter's application was deemed complete on October 15, 1983. Based on information available to DHRS at that time it was impossible for DHRS to review the project because DHRS did not know what kind of beds Charter was asking for. Prior to the public hearing on November 8, 1983, Mr. Straughn was totally confused as to whether Charter wanted short-term or long-term beds. He called Mr. Holbrook at Charter and asked for clarification.
By letter dated November 8, 1983, which was undoubtedly first presented to the DHRS at the public hearing held on that date, Charter explained exactly what kinds of beds it was seeking. Prior to November 8, 1983, it was not clear what kinds of beds Charter was seeking. And although the matter is still somewhat ambiguous and not completely free from doubt, careful review of the original application tends to indicate that the original application was for all short-term beds.
Findings regarding the general nature of Charter's proposed facility and programs
Charter is mostly interested in providing treatment to "salvageable adolescents and children." Charter is not interested in treating chronic patients. Chronically ill patients require a longer period of treatment than other patients. If Charter is not treating chronically ill patients, its treatment periods will be on the short end of the treatment spectrum.
The proposed Charter programs do not contain any program which would be appropriate for the treatment of severe sociopathic patients.
Although Charter contends that its 12-bed child psychiatric unit will be a long-term unit, the program it describes for the child psychiatric unit is clearly a short-term program.
Charter contends that one of its proposed 16-bed adolescent units would have an average length of stay of 25 days and that the other 16-bed adolescent unit would have an average length of stay of more than 90 days. Other evidence discussed below indicates that Charter's expectations of average lengths of stay in excess of 90 days are unwarranted given the nature of the
programs proposed by Charter and the experience of existing providers in Broward County and Charter's facility in Ft. Myers, Florida.
The programs described in the Charter application are identical to the programs described in the earlier North Beach application. The North Beach application was for a short-term facility. There is nothing in the treatment programs described in the Charter proposal that makes them long-term programs.
The proposed Charter treatment programs are identical to existing programs at Florida Medical Center and Fort Lauderdale Hospital. The diagnostic and evaluation portion of the Charter programs is no different from what is currently being done at Florida Medical Center and Fort Lauderdale Hospital. In reality, diagnosis and treatment occur simultaneously. From the day a patient is admitted he is being treated as well as diagnosed. There is no advantage in segregating patients who are being evaluated and patients who are being treated.
The programs proposed by Charter are very typical of the programs used by most child and adolescent psychiatric hospitals in the United States.
A condition placed on the certificate of need that Charter is seeking is that at least 5 percent of the projected patient days and projected revenues will be comprised of Baker Act patients.
Long-term child and adolescent psychiatric patients are generally chronic patients. It is a contradiction in terms for Charter to say on one hand that it is a long-term facility and to then say it will not treat chronic patients.
The step system is a treatment program typically used in short-term psychiatric facilities. It does not work with chronic child and adolescent patients that require long-term treatment.
The Charter proposal envisions extensive cooperation and coordination with other forms of existing health care resources, particularly in discharge planning and follow-up.
Given the nature of the types of patients Charter proposes to treat (acute patients) and the experience of existing providers in Broward County and in Charter's Ft. Myers facility in treating similar patients, the most reasonable expectation is that the average length of stay of patients at Charter's facility would be substantially less than the 90 days or more it projects. The most reasonable expectation is that the average length of stay of child and adolescent patients at Charter's proposed facility would be 60 days, or less.
Findings regarding Charter's ability to provide quality of care
Charter Medical is committed to providing a high quality of care at its facilities. It operates other psychiatric hospitals in Florida and does not appear to have experienced any quality of care problems in those facilities. Nevertheless, Charter only proposes to use 29 FTE's for its 60-bed facility in Broward County, which is a lower ratio of staff to patients than the current practice at some existing facilities. Also, Charter proposes to use some LPN's on its staff, while current practice at some existing facilities is to use only registered nurses.
Findings regarding Charter's occupancy experience with other new psychiatric hospitals
It has been Charter's past experience with opening new psychiatric hospitals, that the reasonable expectation for average occupancy during the first year of operation is in the neighborhood of 30 percent to 45 percent. This is true even when the facility has strong community and physician support.
Of ten psychiatric hospitals opened by Charter during the past three years, most had occupancy rates during their first year of operation in the range of 30 percent to 45 percent. One was less, around 20 percent. Its best was around 60 percent, which was in Charter's home city.
Charter's experience with bad debt during the first year of operation is in the range of 6 percent to 8 percent.
Findings regarding one of Charter's other Florida psychiatric hospitals
Charter Glade Hospital in Ft. Myers, Florida, is a psychiatric hospital with 104 beds. It offers the following programs:
--adolescent programs
--adolescent addictive disease program
--adult addictive disease/chemical dependency program
--general adult psychiatric program
The average occupancy rate at Charter Glades Hospital during its first year of operation was 49 percent. A consideration which contributed to this occupancy rate is the fact that Charter Glades has no nearby competition offering psychiatric services.
The average length of stay for adolescent patients at Charter Glades Hospital is between 45 and 55 days. Charter Oakdale uses the step or level system in its treatment programs for adolescents. It is a very typical form of adolescent psychiatric treatment and is essentially the same form of treatment presently used in the existing adolescent psychiatric programs in Broward County. It is also essentially the same form of treatment that is proposed for Charter's Broward County facility.
Findings regarding the District and State Plans and DHRS information
The applicable District Plan does not address the need for long-term psychiatric or substance abuse beds in District X. The District Plan recommends, in essence, that with regard to short-term psychiatric and substance abuse services, any new facilities should not exceed the bed need methodology set forth in Rule 10-5.11(25), Florida Administrative Code. The District Plan recommends that both psychiatric and substance abuse facilities should provide specialty services by population, age, and socioeconomic characterization. The District Plan also recommends that all psychiatric facilities should provide for a continuum of care. The District Plan recommends that inpatient psychiatric facilities have a minimum of 20 beds. The District Plan recommends a smooth transition between inpatient and outpatient services.
The State Health Plan is too old and out of date to be a useful tool in the evaluation of applications for certificates of need.
The District Plan does not indicate how many of the existing beds are dedicated to child or adolescent patients. Therefore, it is difficult for the DHRS to apply the separate 75 percent occupancy standard for adults and the 70 percent occupancy standard for children and adolescents.
According to the best information available to the DHRS, during 1983 the combined (child, adolescent, and adult) occupancy rate in Broward County was approximately 68 percent, which is below both rule standards. (The evidence in this case indicates that the occupancy rates are somewhat lower, as noted hereinafter).
The basis for the DHRS proposal to approve the short- term beds notwithstanding the fact that the occupancy standards were below those provided in the applicable rules was described as follows by Mr. Porter:
However, in view of the proposal in its entirety, to include the long-term child and
adolescent beds which are being proposed in this facility, and the absence of any such beds, a demonstration of need for those beds in this district, that is an overriding factor to specifically that criteria where occupancy of existing short-term beds does not exceed the standard quoted in the rule.
There is no specific rule formula or methodology for determining need for long-term psychiatric or substance abuse services. The reasoning behind the DHRS proposal to approve the long-term beds included in this proposal was explained as follows by Mr. Porter:
I think in combination of the fact that there were no similar and like services in this particular district, certainly through supporting documentation in the application as well as some statements which were made in the District X mental health plan, and an indication of the number of patients who were also seeking care at Grant Center Hospital.
A combination of all those factors led the Department to conclude that there was, in fact, a need for long-term psychiatric and substance abuse services for children and adolescents in District X.
The Bureau of Economic and Business Research ("BEBR") population projections for Broward County for 1989 is 1,264,869.
Findings regarding the same or similar services in Broward County
There are seven existing facilities in District X which provide inpatient psychiatric services, The DHRS regards all seven of these facilities as "short-term" psychiatric facilities, but the evidence indicates otherwise. The seven existing facilities are:
Broward General Medical Center Florida Medical Center Imperial Point
Memorial Hospital Coral Ridge
Fort Lauderdale Mental Health Institute Broward Pavilion
The DHRS Certificate of Need Review Section does not have a reliable inventory of psychiatric beds in Broward County or South Florida in general.
The DHRS does not have any clear information on the number of existing psychiatric beds that are adult beds and the number that are child or adolescent beds. General hospitals do not report occupancy by service. Accordingly, the DHRS does not have available any occupancy rates for the most recent 12-month period for psychiatric beds in general hospitals in Broward County.
Pursuant to the best information available to the DHRS, the occupancy of the freestanding specialty psychiatric facilities in Broward County was as follows for the most recently documented 12-month period:
Coral Ridge Psychiatric | 74 beds | 60.0 percent |
Ft. Lauderdale Hospital | 58 beds | 40.4 percent |
Hollywood Pavilion | 46 beds | 58.1 percent |
TOTALS | 178 beds | 51.1 percent |
The following hospitals in Broward County offer specialized inpatient units for adolescents: Fort Lauderdale Hospital, South Florida State Hospital, Community Hospital of South Broward and Coral Ridge Hospital. South Florida State Hospital also has a specialty inpatient unit for children. Fort Lauderdale Hospital and Community Hospital of South Broward offer specialized inpatient substance abuse programs for adolescents.
The following hospitals all treat adolescents, but do not have specialized units for adolescents:
Broward General Hollywood Pavilion Hollywood Memorial Imperial Point
Florida Medical Center has 74 approved psychiatric beds and has 54 or
59 presently in operation. There are plans to construct more physical space to move up to full authorization. They will use existing beds to increase their psychiatric beds to the full authorized number of psychiatric beds. Florida Medical Center has a closed adolescent unit of 20 beds and a closed adult unit of approximately 25 beds. It also has a small geriatric unit. Florida Medical Center does not have beds specifically designated for patients under age 11, although, on rare occasions, it treats patients under age 11.
Florida Medical Center has very high quality programs for adolescent psychiatric patients. These programs are in substance no different from the programs described in Charter's application. All psychiatric hospitals treating acute patients have behavior modification programs based on rewards and punishments. Florida Medical Center offers all of the proposed Charter programs in a short-term psychiatric program.
The diagnostic and evaluation program described in the Charter application is not considered a separate program at Florida Medical Center. It is a standard process of every psychiatric admission to pursue diagnosis and evaluation. One can often reach a diagnosis in 30 days, but not always. All psychiatric hospitals use a diagnostic and evaluation system, but they do not designate diagnosis and evaluation as a separate program.
The average length of stay at Florida Medical Center's adolescent psychiatric unit is 64 days. The average length of stay at that unit if one takes out all patients who stay less than 30 days is 78.3 days. Nine of Florida Medical Center's 36 adolescent psychiatric patients have stayed longer than 90 days. Florida Medical Center has provided treatment of six months duration to a few of its adolescent psychiatric patients.
As of the date of the hearing the total census of the Florida Medical Center psychiatric beds (adult and adolescent) was slightly less than 30 patients. As of the date of the hearing, Florida Medical Center had 8 adolescent psychiatric patients out of a capacity for 20. There has never been a waiting list for the adolescent psychiatric beds at Florida Medical Center.
With regard to staffing, Florida Medical Center has 21 FTE's for its 20-bed adolescent psychiatric unit. It uses all registered nurses in its adolescent unit and has no LPN's.
In the 12 month period preceding the hearing, the number of total patient days for all types of patients at Florida Medical Center has dropped 20 percent. The DRG system of reimbursement is causing a drop in patient days, which can be expected to result in excess bed capacity.
The DRG system of reimbursement is not applicable to child and adolescent psychiatric services. The anticipated impact of DRG's on the delivery of psychiatric services is that DRG's will result in an excess of med/surg beds which will cause hospitals with those excess beds to try to convert them to something else, including psychiatric beds.
Fort Lauderdale Hospital is a specialty psychiatric hospital and is licensed for 100 beds. It has the following programs:
18 beds -- intensive adult care (very short-term)
23 beds -- adolescent psychiatry
20 beds -- adolescent substance abuse
18 beds -- adult psychiatry (open)
16 beds -- adult substance abuse
Presently Fort Lauderdale Hospital has only 95 beds set up. It could set up the other five within less than half a day if it had patients for them.
For the period December 1, 1982, through November 30, 1983, the average length of stay in the Fort Lauderdale Hospital adolescent psychiatric unit was 54 days.
For the period December 1, 1983, through July 30, 1984, the average length of stay in the Fort Lauderdale Hospital adolescent psychiatric unit was
48.6 days.
For the period December 1, 1982, through November 30, 1983, the average length of stay in the Fort Lauderdale Hospital adolescent substance abuse unit was 44.7 days.
For the period December 1, 1983, through July 30, 1984, the average length of stay in the Fort Lauderdale Hospital adolescent substance abuse unit was 45.1 days.
For the 12 months ending November 30, 1983, the average length of stay for adolescent psychiatric patients who stayed 30 days or less was 13.28 days.
For the 12 months ending November 30, 1983, the average length of stay for adolescent patients who stayed 31 days or longer was 74.17 days.
Fort Lauderdale Hospital has some patients who stay longer than 90 days.
The average daily census for the Fort Lauderdale Hospital adolescent psychiatric unit is 12.5 patients (out of 23 available beds).
The average daily census for the Fort Lauderdale Hospital adolescent substance abuse unit is 10.8 patients (out of 20 available beds).
Fort Lauderdale Hospital offers all of the programs described in the Charter proposal. There is nothing unusual about those programs. Fort Lauderdale Hospital is very concerned about quality of care and provides high quality of care. Fort Lauderdale Hospital is involved in numerous community activities. It has community outreach programs and community educational programs. Fort Lauderdale Hospital has been trying continuously to have the public school system provide additional hours of school at the hospital, but the school system has failed to do so.
Fort Lauderdale Hospital has an open medical staff. It has about 18 psychiatrists on the staff. If it had a closed medical staff limited to 4 or 5 psychiatrists it is reasonable to expect that psychiatric admissions would be reduced by 50 percent or more.
Coral Ridge Hospital is licensed for 86 psychiatric beds. It is a long-term psychiatric treatment facility. Ninety- nine percent of the patients at Coral Ridge Hospital are chronic patients. At one time Coral Ridge Hospital was a short-term facility treating primarily acute patients, but it began turning into a long-term facility in 1977-78, and is now exclusively long-term.
Coral Ridge Hospital has a 12-bed unit for children and adolescents. It also has a 24-bed substance abuse unit in which it can also place adolescents.
The average length of stay of patients at Coral Ridge Hospital is well in excess of six months, perhaps as much as a year. Some patients at Coral Ridge Hospital stay as long as 18 months.
As of the time of the hearing, there were three patients in the 12-bed child and adolescent unit at Coral Ridge Hospital. During the previous year Coral Ridge Hospital had had as many as 8 or 10 child and adolescent patients.
As of the time of the hearing Coral Ridge Hospital had 44 beds filled out of a total of 86. Its average census during the previous 12 months was around 55 patients, or about 64 percent occupancy.
Charges for room and board at Coral Ridge Hospital are about $195 per day. Total charges, which includes room and board, physician and therapy fees, tests, etc., range from about $6,000 to about $10,000 per month.
Coral Ridge Hospital provides between 15 percent and 20 percent free services.
Broward General Medical Center is a 744-bed acute care short-term hospital located in Ft. Lauderdale, Florida. It has a psychiatric unit in which it treats patients 14 years of age and older.
South Florida State Hospital in Broward County has a 50-bed children's unit and a 50-bed adolescent's unit.
All of the services proposed by Charter are presently available in Broward County. There are an adequate number of existing beds available in the private sector for long-term psychiatric treatment in Broward County or close to Broward County. There is an existing good distribution of long-term inpatient psychiatric services along the southeast coast of Florida.
Findings regarding the same
or similar services in adjacent districts
Grant Center Hospital is a 100-bed child and adolescent inpatient psychiatric hospital in Dade County which specializes in providing long-term care. Grant Center is within a two hour travel time from Broward County. A true long-term adolescent psychiatric program such as they have at Grant Center
-- envisions stays of a minimum of six months, often closer to a year, and sometimes lasting as long as two years. The average length of stay at Grant Center is 290 days.
The ages of patients at Grant Center range from 5 years old to 19 years old. Children up to 6 years of age make up a insignificant portion of Grant Center's patient population.
Dade County is the primary service area for Grant Center. However, 12 percent of Grant Center patients come from Broward County and 6 percent of its patients come from Palm Beach County.
During 1984 the occupancy level at Grant Center averaged 98 percent. The usual waiting list at Grant Center has been 5 to 12 patients. Grant Center has been granted a certificate of need to add 60 beds for long-term child and adolescent psychiatric services. Those 60 beds are under construction and will be on line by the end of 1985. The approved cost of those 60 beds was $1.7 million. The 60 new beds at Grant Center will occupy about 28,000 square feet.
Every patient that comes to Grant Center receives intensive diagnosis and evaluation such as is proposed by Charter, but Grant Center does not call that a separate program.
During 1984, 18 percent of Grant Center revenues were written off as either bad debt, free care, or charity cases.
Highland Park is a 72-bed facility located in the center of Miami, Florida. Highland Park is owned by the same group that owns Grant Center. Highland Park has a 16-bed child and adolescent unit. It is common for children and adolescents to stay at Highland Park for over 90 days. Highland Park is within two hours travel time from Broward County.
In 1983 there were 20 psychiatric beds at Biscayne Hospital with an occupancy rate of 63.9 percent. Biscayne Hospital is in north Dade County, within two hours travel time from Broward County.
In 1983 there were 56 psychiatric beds at North Miami Hospital with an occupancy rate of 60.9 percent. North Miami Hospital is in north Dade County, within two hours travel time from Broward County.
On February 28, 1984, a certificate of need was granted for 60 long- term adolescent psychiatric beds in Boca Raton. Boca Raton is within a two hour drive of Broward County.
Psychiatric Institute of Delray was granted a certificate of need to add 15 long-term child and adolescent psychiatric beds. This is within a two hour drive of Broward County.
National Medical Enterprises was granted a certificate of need to add
25 child and adolescent psychiatric beds. These beds are within a two hour drive from Broward County.
Findings regarding other health care facilities and services
In North Dade, South Palm Beach, and Broward County there are about
500 beds offering residential psychotherapeutic services for adolescents.
Findings regarding manpower and accessibility
Charter can reasonably expect to be able to secure the necessary health manpower to staff its facility at the proposed FTE level.
With regard to geographic accessibility, the proposed Charter facility will be accessible to more than 90 percent of the residents of Broward County.
With regard to financial accessibility, the $64,000 that Charter projects for charity care equates to three indigent patients for 60 days each per year.
Findings regarding financial feasibility of the proposal
Although Charter does not yet have a commitment for its proposed revenue bonds, given the financial assets of the parent company and its history of obtaining financing for other similar projects it would appear that the project is immediately financially feasible in the sense that Charter has or can obtain the financial wherewithal to pay for the cost of building the facility.
The long-term financial feasibility of the project is quite another matter. For many of the reasons set forth below the long-term financial feasibility of the proposed facility looks rather bleak.
Charter's pro formas and other projections for the future were prepared in large part by Mr. Follmer, but Mr. Follmer appears to have made a lot of unwarranted assumptions and guesses in the formulation of his estimates and projections.
Mr. Follmer expressed confidence in the availability of private insurance to pay for a substantial amount of the services provided by the proposed facility, but Mr. Follmer has never seen a composite report showing the average psychiatric insurance coverage for adolescent patients in Broward County. In fact no more than 10 percent of the adolescent patients seen at Fort Lauderdale Hospital have private insurance coverage in excess of 90 days.
Mr. Follmer projects that Charter will have occupancy at a rate of 55 percent during its first year of operation, 65 percent during its second year of operation, and 80 percent during its third year of operation. For reasons which are set forth at the end of these findings of fact, it must be concluded that these projections are totally unrealistic and without reliable factual foundation.
Based on a number of factors, including specifically Charter's first year experiences with its other psychiatric hospitals, the recent experience of existing psychiatric hospitals in and near Broward County the fact that Charter will have closed medical staff, the fact that its medical staff is not presently
operating in Broward County and has no established following of patients, and the fact that Charter has no agreements for the referral of psychiatric patients from general hospitals, an optimistic projection for its occupancy rate during the first year of operation would be in the range of 35 percent to 40 percent, and there is no reason to expect it would achieve better than 50 percent to 55 percent occupancy during its second year of operation. The estimate of 80 percent occupancy during the third year of operation is sheer speculation for which there is no competent substantial evidence and which is totally contraindicated by the experience of existing providers of the same or similar services.
The foregoing regarding the occupancy that can realistically be expected by Charter takes into consideration only the adolescent aspect of Charter's proposed facility. When the 12-bed children's unit is taken into consideration, the reasonable occupancy expectations become bleaker yet. It is very uncommon to admit a child under 12 years of age for inpatient psychiatric hospital treatment. Families tend to resist recommendations that children under
12 be hospitalized in a psychiatric hospital. There is no measurable demand or need for long-term child psychiatric beds in Broward County. On the rare occasions when a child under 12 is hospitalized in a psychiatric hospital, most such hospitalizations are for very short periods, often only for a few days. Further, if a child under 12 must be hospitalized for psychiatric reasons it is usually better to hospitalize them in a psychiatric wing of a general hospital, due in large part to parental resistance to hospitalizing children under 12 in a psychiatric specialty hospital. Finally, South Florida State Hospital, which is an excellent facility, already has beds for children under 12.
Another indicator that Charter's occupancy levels will be much lower than originally projected is that Charter's projected patient charges of $355 per day are substantially higher than the patient charges at some existing facilities providing similar services. These higher charges will have a negative impact on Charter's ability to compete effectively with existing providers of the same of similar services.
Mr. Follmer's pro forma assumptions for the first year include the following:
--6 percent for bad debt.
--1.5 percent for indigent care.
--2.5 percent contract adjustment for Baker Act.
For the second year pro forma, Mr. Follmer assumes 5 percent for bad debt. These assumptions are totally unrealistic when compared to the experiences of existing providers in and near Broward County. The bad debt experience for the psychiatric unit at Florida Medical Center during the 18 months immediately preceding the hearing was approximately 16 percent of gross revenues. Coral Ridge Hospital provides between 15 percent and 20 percent free services. During 1984, 18 percent of Grant Center revenues were written off as either bed debt, free care, or charity cases. In light of these experiences, it is unrealistic for Charter to project 7.5 percent as its expected loss of revenue due to bad debts and indigent care. A much more reasonable (and still conservative) estimate would be in the range of 10 percent to 12 percent for bad debt and indigent care during its first few years of operation.
Another negative impact on the revenue projections has to do with Baker Act patients. The proforma assumes that 5 percent of patient days will be made up of Baker Act patients and that the hospital will get paid approximately
50 percent of its usual charges -- thus the 2.5 percent "contract adjustment" for Baker Act patients in the pro forma. For the reasons which follow, the 2.5 percent "contract adjustment" should be a 5 percent "contract adjustment."
Charter does not have any contracts for receiving any Baker Act funds ford its proposed Broward County facility. Baker Act funds are presently not available in Broward County for private psychiatric hospitals, and Mr. Follmer has no idea what the availability of Baker Act funds for Broward County will be in the future. Without any Baker Act funds there would be a loss in both of the first two years of operation per the pro forma.
The Charter Glade facility had an agreement to take Baker Act patients, but never got any because the funding ran out.
Findings regarding impact on existing providers
If Charter's proposed facility is built, it will most likely reduce the patient census at Fort Lauderdale Hospital. A reduced census at Fort Lauderdale Hospital could require reductions in staff and programs, which would impair quality of care and could also threaten accreditation of the hospital.
Florida Medical Center's existing facility is less than three miles from Charter's proposed location. It is reasonable to expect that Charter's facility would divert adolescent patients from Florida Medical Center's psychiatric unit with results similar to those described in the preceding paragraph.
If Charter's proposed facility is built it is reasonable to expect that it would have a similar negative impact on other existing Broward County hospitals offering adolescent psychiatric services.
Findings regarding costs and methods of construction
All of Charter's proposed construction costs are reasonable estimates of the actual cost of construction. The costs proposed in this case are substantially the same as the costs which were incurred to construct Charter's Ft. Myers facility.
The proposed cost of construction and site preparation of Charter's Broward County facility comes to $97 per square foot. The proposed construction cost of just the building comes to $81 per square foot.
The equipment list in the Charter proposal and the amounts listed for the various items of equipment are reasonable for the type of facility Charter proposes for Broward County.
Charter uses a prototype design for its psychiatric hospitals. About
8 or 9 of the prototype hospitals have been built. The Charter prototype design is the same design that is used by Charter for short-term hospitals.
Charter's proposed floor plan looks like a plan for an acute care (short-term) facility.
Findings regarding DHRS policies
The geographic access standard for long-term psychiatric beds is that at least 90 percent of the population in the service district should be within a two hour one-way drive of existing services. In applying that travel standard the DHRS looks at services available in other districts within the two hour travel radius.
The travel time standard for long-term psychiatric beds would be meaningless if applied literally because, given the size of the DHRS Districts, it would virtually always be met and would become, in essence, a nonstandard. The DHRS construction of the travel standard for long-term psychiatric beds is to consider the availability of services within a two-hour travel radius of the proposed facility. In other words, need for long-term psychiatric services in the district in which a new facility is proposed is determined in part by the availability of the same or similar services within a two-hour travel radius, regardless of whether that radius extends into other districts. A certificate of need for long-term psychiatric beds will not normally be granted if there are available underutilized beds within the two-hour travel radius, even if the available beds are in the next district. The DHRS has applied this interpretation of the travel time standard in other cases involving applications for long-term psychiatric beds.
The reason DHRS crosses district boundaries in looking at need for long-term psychiatric beds is that long-term psychiatric care is a "regional" type of service. The DHRS also crosses district boundaries when looking at need for other "regional" types of services such as cardiac catherization and open heart surgery.
In reviewing applications for certificates of need, the DHRS does not base its determination on a single statute or rule criterion. It uses a balancing process and considers all of the criteria in an effort to arrive at a reasonable judgment. The DHRS considers other evidence of need in addition to any indications of need found by strict application of the formulas.
It is the policy at the DHRS not to do health planning on the basis of national statistics. This is because Florida's population differs in composition from the average of the national population. Florida has a large elderly population. It also has large population growth. The Florida population is less stable and more dynamic than the national population. DHRS tries to use local measures or statewide measures.
Strong community support is not one of the statutory criteria for determining need for a health care facility.
In determining bed need for psychiatric hospitals it is the policy of the DHRS not to consider the differences in medical opinion with regard to which of several approaches to the treatment of psychiatric patients may be the best form of medical treatment for psychiatric patients who require hospitalization.
Findings required by subparagraph 1 of Sec. 381.494(6)(d), Fla. Stat.
A less costly, more efficient, and more appropriate alternative would be to postpone the construction of any facilities such as those proposed by this applicant until such time as existing facilities offering the same or similar services have much higher occupancy rates.
Findings required by subparagraph 2 of Sec. 381.494(6)(d), Fla. Stat.
Existing inpatient facilities providing similar services are not being used in an efficient manner because they all are experiencing low utilization rates. Approval of Charter's proposed facility would cause use of existing facilities to become more inefficient.
Findings required by subparagraph 3 of Sec. 381.494(6)(d), Fla. Stat.
The best alternative to new construction at this time is no construction at this time, due to the underutilization of existing same or similar facilities. The best alternative in the future would appear to be to prefer conversion of underutilized med/surg beds if DRG-generated occupancy trends for those beds continue to cause those beds to be underutilized.
Findings required by subparagraph 4 of Sec. 381.494(6)(d), Fla. Stat.
Patients will not experience serious problems in obtaining inpatient care of the type proposed, in the absence of the proposed new service. Existing facilities providing the sane or similar inpatient care are underutilized and have more than adequate unused capacity.
Rejected proposed findings of fact
I have rejected substantially all of Charter's proposed findings based on the testimony of the "community support" witnesses. This rejection is based largely on the fact that those findings are irrelevant to any determination of a need for the facilities proposed by Charter. Further, with but few exceptions, the "community support" witnesses appeared to be distinctly uninformed about either the details of the Charter proposal or details regarding the current availability of inpatient psychiatric services for children and adolescents in Broward County. Finally, most of the testimony of these witnesses relating to need for the proposed facility was contrary to the greater weight of the evidence. Included within the appellation "community support" witnesses are: Marie Reynolds, Toni Siskin, Barbara Myrick, James Deleo, Sally Cresswell, Marjorie Miller, Susan Buza, Barbara Mitchell, Anne McKenzie, and Sharon Solomon.
I have rejected substantially all of Charter's proposed findings based on the opinion testimony of Mr. Fred Follmer. Mr. Folmer's estimates and projections are totally lacking in credibility. As became most evident during the devastating cross-examination, Mr. Follmer did not have information he needed to make his projections, he ignored or overlooked information he did have, he relied on information about matters which are not analogous to the subject proposal, and some of his explanations of the basis for his projections are simply illogical.
With regard to the issue of whether existing inpatient psychiatric programs for children and adolescents are similar to or different from the programs proposed by Charter, I have for the most part discounted the testimony of the Charter witnesses about the "uniqueness" of the Charter programs and have tended to credit the testimony of witnesses who are personally involved in the delivery of inpatient psychiatric services to children and adolescents in Broward County. This is due in large part to the fact that Charter's witnesses did not do a very extensive job of describing the nature of the programs it proposes to offer through Dr. Schwartz' group, and particularly did not come forward with any convincing evidence of the "uniqueness" of the proposed programs. I am persuaded by the testimony on behalf of the Petitioners and Intervenor that the proposed programs are not unique.
I have not made any findings based on the testimony about Charter Barclay Hospital in Chicago because that testimony is lacking in relevancy in view of the testimony in the record about Charter Glade Hospital in Ft. Myers, Florida. To the extent of any differences in Charter's experiences operating a Chicago hospital and a Ft. Myers hospital, the latter is much more relevant to any expectations or projections regarding a Broward County hospital.
For the following reasons, I have not made any findings regarding the need for Charter's proposed services based on the testimony of Dr. Luke. First, Dr. Luke's conclusions are irrelevant because they purport to measure need for services having an average length of stay of 120 days based on statistics regarding numbers of admissions lasting 91 days or more. The persuasive evidence is to the effect that the most likely average length of stay at Charter's proposed facility would be similar to the average length of stay of existing facilities treating acute adolescent patients -- a length of stay substantially less than 91 or 120 days. Second, Dr. Luke's conclusions were based on a number of assumptions which were either not shown to be valid or which were shown to be contrary to the persuasive evidence. Dr. Luke assumed an unrealistic average length of stay. Dr. Luke disregarded the manner in which the DHRS interprets and applies the travel-time standard in the applicable rule. Dr. Luke assumed the OGME admission rates are valid predictors for Broward County, but I am not convinced that they are, particularly in light of the DHRS policy of attempting to use local or statewide indicators rather than national indicators Dr. Luke assumed incorrectly that there are no long-term psychiatric beds in Broward County. Finally, Dr. Luke assumed incorrectly that the Charter proposal would provide a treatment program which is not presently available in Broward County.
A major portion of the need analysis expert testimony in opposition to Dr. Luke was that of Mr. Konrad. While there are some areas of Mr. Konrad's testimony that are a bit problematic, I am persuaded on the whole that Mr. Konrad's opinions are better founded than those of Dr. Luke and have resolved most differences in their opinions in favor of the testimony of Mr. Konrad.
As a final matter in this regard, it should be noted that there was an enormous amount of testimony which was the foundation for an enormous number of proposed findings that are "subordinate, cumulative, immaterial or unnecessary." I have rejected all of those proposed findings because they are Immaterial and irrelevant to the disposition of the issues in this case.
CONCLUSIONS OF LAW
Based on the foregoing findings of fact, on the stipulations of the parties, and on the applicable statutes, rules, and court decisions, the following conclusions of law are made.
The Division of Administrative Hearings has jurisdiction over the parties to and the subject matter of these proceedings. Sec. 120.57, Fla. Stat.
The Petitioners and the Intervenor have demonstrated their standing to oppose Charter's application. See Collier Medical Center Inc. v. State, Department of HRS; 10 FLW 133 (Fla. 1st DCA 1985); Community Psychiatric Centers, Inc. v. Department of HRS, 10 FLW 1776 (Fla. 1st DCA 1985). Accordingly, Charter's post-hearing motion to strike the petitions in these cases is denied.
CPC and FPC both filed similar post-hearing motions to reopen the evidentiary record for the purpose of having the Hearing Officer take judicial notice of a post-hearing recommended order in another case involving an application for psychiatric and substance abuse beds in Broward County. Charter and DHRS opposed the motion. The motions to reopen the record are denied. See Collier Medical Center, supra; Health Ouest Realty XII v. Department of HRS, 10 FLW 1729 (Fla. 1st DCA 1985).
It is well-settled that in order to be entitled to issuance of a certificate of need, an applicant bears the burden of proving that it complies with the applicable statutory and regulatory criteria for review. The review criteria applicable to this proceeding are set forth in Section 381.494(6)(c) and (d), Florida Statutes, and in Rule 10-5.11(1)-(12), (25), (26), and (27), Florida Administrative Code. Although the record in this case is quite large when it is boiled down to its relevant and persuasive essentials, Charter has failed to prove a number of essential prerequisites to approval of the certificate of need it seeks.
There are many reasons which compel a recommendation that the Charter application for a certificate of need be denied. Among the more important ones are lack of persuasive evidence about the financial feasibility of the project, lack of persuasive evidence showing a need for the proposed project, and a positive indication that the services proposed by Charter would most likely result in charges to patients substantially higher than the charges to patients for existing similar services. Further, Charter's proof fails to address some of the critical issues raised by the applicable rules.
Addressing attention to the issue of financial feasibility, for reasons which are discussed above in the explanation of reasons for rejecting proposed findings of fact, there is no logical basis for the projections in the pro forma of a 55 percent occupancy rate in the first year of operation and a 65 percent occupancy rate in the second year of operation. As I have found in the foregoing findings of fact, based on the evidence of Charter's prior experience in the first year of operation of new hospitals and based on the current occupancy rates of existing psychiatric hospitals in Broward County, particularly those with programs for the treatment of acute psychiatric conditions of children and adolescents it is much more reasonable to project a first year occupancy rate for the proposed Charter facility in the range of 35 percent to 40 percent and a second year occupancy rate in the range of 50 percent to 55 percent. If the pro forma is adjusted to reflect the more reasonable occupancy rates and is further adjusted to reflect the fact that
there is no persuasive evidence that Charter would be likely to receive any Baker Act funds, it will show substantial losses in both of the first two years of operation, with no persuasive evidence of any reasonable prospect for a profit in the third or subsequent years of operation.
And, as observed in the findings of fact, the foregoing takes into consideration only what is to be expected with regard to the adolescent aspect of the facility. Considering the almost total absence of any demand for psychiatric hospitalization services for children under 12, it would be most unlikely that the children's component of Charter's proposed facility could expect even the occupancy rates described above.
Charter's high daily charges would also make it difficult for Charter to compete effectively and would further contribute to the lack of financial feasibility of the proposed project.
The evidence demonstrates clearly that there is simply no need for the services proposed by Charter. The services Charter proposes to offer are simply not long-term services -- they are short-term services. And there is an abundance of existing unused capacity for short-term psychiatric hospital services in Broward County. The short-term adolescent psychiatric programs existing in Broward County today are offering services which are substantially identical to the proposed Charter programs and they have an occupancy rate for the most part in the neighborhood of 50 percent to 55 percent, which is far below the utilization rate which would justify adding additional beds to treat acute adolescent psychiatric patients.
With regard to the cost of providing health care, assuming for purposes of argument that Charter's adolescent patients were going to have average lengths of stay of 120 days, those patients would be staying just about twice as long as similar patients are now staying in existing facilities. And when one considers that Charter's daily charges are at least a bit higher than daily charges at existing hospitals providing the same service, the net effect would be that the patients would be paying roughly twice as much as the present cost for similar services.
Directly related to the foregoing is the fact that if Charter's project were to be approved it is virtually certain that it would draw patients from existing underutilized facilities providing the same services. The most reasonable results to be expected from such a siphoning-off of patients from existing facilities would be that existing facilities would have to increase charges to continue to make ends meet or would have to cut expenses and thereby run the risk of impacting quality of care. Neither result is to be desired.
Consideration of the foregoing in light of the statutory criteria leads to the conclusion that on the basis of the considerations involved in at least subparagraphs (2), (9); and (12) of Section 381.494(6)(c) Florida Statutes, the application should be denied -- the services proposed are already available, the project is not financially feasible, and the project would have adverse impacts on the cost of providing services and competition. And there are yet other reasons for the denial.
A major additional reason for denial is that Charter's proposed project is contrary to all four of the applicable subparagraphs of Section 381.494(6)(d), Florida Statutes. First, it would be a less costly, more efficient, and more appropriate alternative to Charter's proposal to deny the application and thereby foster greater utilization of existing adolescent
psychiatric beds. Second, the existing inpatient facilities providing inpatient services similar to those proposed are being used inefficiently due to underutilization. This inefficient use would be worsened by approval of Charter's proposal. Third, there is no proof that alternatives to new construction have been considered and have been implemented to the maximum extent possible. Fourth, there is no proof that patients will experience serious problems in obtaining inpatient care of the type proposed, in the absence of the proposed new service. Quite to the contrary, the evidence clearly establishes that inpatient care of the type proposed is underutilized.
Turning now to some of the rule considerations, Rule 10-5.11(25), Florida Administrative Code, contains rule provisions regarding short-term hospital inpatient psychiatric services. These are the rule provisions that are applicable to all of the psychiatric beds sought by Charter because of the finding of fact that the most likely average length of stay of psychiatric patients at Charter's proposed facility would bring those beds within the short- term rule.
The rule first provides for a population based methodology which applies a factor to the total projected population and then subtracts existing and approved beds. The proof in this case does not permit application of this methodology because there is no reliable proof of the actual number of existing short-term psychiatric beds in Broward County. The proof merely establishes that the figures used by DHRS are incorrect. There is no proof of the correct number.
The rule also requires that new facilities must be able to project an average occupancy rate of 60 percent for children and adolescent beds in the second year of operation and an occupancy rate of 70 percent for children and adolescent beds in the third year of operation. There is no persuasive evidence that Charter could meet this requirement.
Another requirement of the rule is that no additional short-term psychiatric beds for children and adolescents will be approved unless the occupancy rate for all existing such beds in the district is at or exceeds 70 percent for the preceding 12 month period. The proof in this case is that average occupancy of such beds is in the range of 50 percent to 55 percent.
The rule also requires that hospitals proposing to build a new but separate psychiatric acute care facility and intending to apply for a specialty hospital license should have a minimum of 50 beds. Charter is only seeking 44 psychiatric beds.
And paragraph 6 of subsection (e) of the rule states:
Development of new short-term hospital inpatient psychiatric beds shall be through conversion of underutilized beds in other hospital services, unless conversion costs are prohibitive when compared with development of new facilities, or other factors to be specified by the applicant prohibit such conversion.
There is simply no proof in this record which addresses the rule requirement quoted immediately above. Although not directly on point, the fact that Grant Center was able to add 6032 beds at a cost of approximately one- fourth of Charter's proposed cost would suggest that conversion costs are probably not prohibitive when compared with development of new facilities.
The greater weight of the evidence being to the effect that the psychiatric beds sought by Charter are short-term beds, only cursory attention need be given to the long-term rule provisions at Rule 10-5.11(26), Florida Administrative Code. It is perhaps sufficient to note that if Charter's proposal were for long-term psychiatric beds it would fail to comply with the occupancy rate standards at paragraphs 1 and 2 of subsection (c) of the long- term rule. It would also fail to comply with paragraph 4 of subsection (c) of the long-term rule because there Is no indication of need for long-term psychiatric beds in the local planning documents.
With regard to the 16 long-term substance abuse beds sought by Charters attention must be directed to Rule 10- 5.11(27), Florida Administrative Code. The cited rule provision contains several requirements and, again, Charter has failed to prove that it meets the requirements. Paragraph 2 of subsection (f) of this rule provision is not met by Charter because the local planning documents do not reflect any need for long-term substance abuse beds. Charter fails to meet the requirements of paragraphs 1 and 2 of subsection (h) of this rule provision because there is no proof that existing substance abuse beds meet the occupancy standards in those paragraphs.
Similar to the case of short-term beds, subsection (h) 8 of the substance abuse rule requires that:
In the establishment of new substance abuse services, preference shall be given to the development of new beds through conversion of underutilized beds in other services, unless conversion costs are prohibitive when compared with development of new services, or other factors to be specified by the applicant prohibit such conversion.
There is simply no proof in the record of this case which addresses the rule requirement quoted immediately above.
Finally, attention is directed to the argument that the DHRS should never have deemed this application complete and should have deemed it withdrawn because it was too ambiguous. Any potential harm which might have been occasioned by the ambiguity and any potential harm which might have been occasioned by the late and substantial amendments have all been cured by the de novo hearing process in which the Petitioners and the Intervenor have all been provided with a full opportunity to litigate all issues raised by the final version of Charter's proposal.
For all of the foregoing reasons it is recommended that the Department of Health and Rehabilitative Services enter a final order denying in its entirety Charter's application for a certificate of need for a 60-bed psychiatric hospital.
DONE AND ORDERED this 16th day of August, 1985, at Tallahassee Florida.
MICHAEL M. PARRISH, Hearing Officer Division of Administrative Hearings The Oakland Building
2009 Apalachee Parkway
Tallahassee, Florida 32301
(904) 488-9675
Filed with the Clerk of the Division of Administrative Hearings this 16th day of August, 1985.
COPIES FURNISHED:
Mr. David Pingree Secretary Department of HRS 1323 Winewood Blvd.
Tallahassee, Florida 32301
John Gilroy, Esquire Department of HRS 1321 Winewood Blvd.
Building 1, Room 407
Tallahassee, Florida 32301
Kenneth G. Oertel, Esquire Oertel and Hoffman
Suite C
2700 Blair Stone Road Tallahassee, Florida 32301
Eric B. Tilton, Esquire Post Office Box 5286 Tallahassee, Florida 32314
Morgan L. Staines
2204 East Fourth Street Santa Ana, California 92705
Cynthia S. Tunnicliff, Esquire CARLTON, FIELDS, WARD, EMMANUEL,
SMITH & CUTLER, P.A.
O. Drawer 190 Tallahassee, Florida 32302
Glen A. Reed, Esquire
Richard L. Shackelford, Esquire BONDURANT, MILLER, HISHON &
STEPHENSON
2200 First Atlanta Tower Atlanta, Georgia 30383
=================================================================
AGENCY FINAL ORDER
=================================================================
STATE OF FLORIDA
DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES
FLORIDA PSYCHIATRIC CENTERS, and FLORIDA MEDICAL CENTER,
Petitioners,
and
COMMUNITY PSYCHIATRIC CENTERS OF FLORIDA, INC., d/b/a
CPC FT. LAUDERDALE HOSPITAL,
Intervenor, CASE NOS. 84-0411 84-0612
vs.
DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES, and CHARTER MEDICAL-FT. LAUDERDALE, INC.,
Respondents.
/
FINAL ORDER
This cause came on before me for the purpose of issuing a final agency order. The Hearing Officer assigned by the Division of Administrative Hearings (DOAH) in the above-styled case submitted a Recommended Order to the Department of Health and Rehabilitative Services DHRS). A copy of that Recommended Order is attached hereto. Charter Medical - Fort Lauderdale (hereinafter referred to as "Charter") filed exceptions to the Recommended Order. Florida Psychiatric Centers (hereinafter referred to as "CPC") responded to Charter's exceptions.
RULING ON EXCEPTIONS
HRS does not look to treatment programs or types of patients to determine classification of beds into short or long term, except where required by the appropriate rule to do so. For instance, under 10-5.11(25)(2) HRS must classify patients to determine whether the proposal meets the definitions of "Acute psychiatric inpatient care". HRS has a right to issue a Certificate of Need predicated upon statements of intent expressed by an applicant in its application for certificate. HRS has a statutory remedy when an applicant fails to substantially comply with statements of intent made in the application. None of these facts, however, lessens the burden of the applicant to prove entitlement when the decision of the agency is challenged. There is competent substantial evidence to support the Findings of Fact at the last sentence in the
second paragraph on page 5, the last full paragraph on page 6, the fourth paragraph on page 5, the last sentence in the first full paragraph on page 6, the last full sentence on page 6, and the second full paragraph on page 7, paragraphs .3, 4, 5 and 6 on page 24, the first full paragraph on page 26, and paragraph 2 on page 26. Charter's 1st, 2nd and 3rd exceptions are denied.
The Hearing Officer applied the drive time standard which is found in Rule 10-5.3.1(26) correctly. Although HRS performs its need calculation according to need in the service district, not to look outside the district to determine geographic accessibility would unduly restrain HRS in its mandate to carry out the intent of the Health Facilities and Health Services Planning Act, and be contrary to common sense. HRS must give consideration to the provision of health care services which are not currently available within a community, but at the same time eliminate unnecessary duplication. If the services are available, it would be folly to ignore them because of artificial boundaries which do not constrain health care consumers There is competent substantial evidence to support paragraphs 3, 4, 5 and 9 on page 17 of the Recommended Order. Charter's 4th exception is denied.
The bed need inventory cannot be the subject of challenge at every
120.57 hearing on certificate of need. If a person believes the inventory to be incorrect, he should ask the agency to change the inventory, and if he is substantially affected by the agency decision, request an administrative hearing to contest that decision. Charter's 5th exception is granted. There is no competent substantial evidence to support the findings at the last paragraph on page 10 of the Recommended Order and the first paragraph on page 15 based upon a review of the complete record; however, there is competent substantial evidence to support the second paragraph on page 16.
It is improper to deny an application solely because need is filled by a later batched applicant. However, that is not the sole reason this application is denied, as is set forth in the Recommended Order. Charter's 6th exception is denied.
Paragraph 2 on page 19, paragraph 3 on page 19, paragraph 5 on page 18, paragraph 6 on page 18, paragraph 3 on page 20, paragraph 2 on page 21, paragraph 5 on page 18 and paragraph 6 on page 18 are based upon competent substantial evidence. Charter's 7th exception is denied.
Paragraphs 4 and 5 on page 21 and paragraph 1 on page 22 are based upon competent substantial evidence. Charter's 8th exception is denied.
The finding on page 7 set forth at IV of Charter's exceptions is based upon competent substantial evidence. Charter's 9th exception is denied.
The applicants for CON 3552 and 3557 have the same burden to prove entitlement, if challenged, as Charter did in these proceedings. Charter's 10th exception is denied.
The Conclusions of Law are supported by the Findings of Fact herein, which are based upon competent substantial evidence. Charter's 11th exception is denied.
FINDINGS OF FACT
The Findings of Fact set forth in the Recommended Order are adopted and incorporated by reference as though fully set forth herein, except the following which are specifically deleted for the reasons set forth in the ruling on exceptions:
The last paragraph on page 10:
"The DHRS Certificate of Need Review Section does not have a reliable inventory of psychiatric beds in Broward County or South Florida in general. The DHRS does not have any clear information on the number of existing psychiatric beds that are adult beds and the number that
are child or adolescent beds. General hospitals do not report occupancy by services. Accordingly, the DHRS does not have available any occupancy rates for the most recent 12-month period for psychiatric beds in general hospitals in Broward County."
The first paragraph on page 15:
"Coral Ridge Hospital is licensed for 86 psychiatric beds. It is a long-term psychiatric treatment facility. Ninety-nine percent of the patients -
at Coral Ridge Hospital are chronic patients. At one time Coral Ridge Hospital was a short-
term facility treating primarily acute patients, but it began turning into a long-term facility in 1977-78, and is now exclusively long-term."
CONCLUSIONS OF LAW
The Conclusions of Law set forth in the Recommended Order are adopted and incorporated by reference herein as though fully set forth.
Based upon the foregoing, it is ADJUDGED
That Charter's application number 2832 for a Certificate of Need for a 60 bed psychiatric and substance abuse hospital in Broward County is DENIED.
DONE and ORDERED this day of 25th day of November 1985 in Tallahassee, Florida.
DAVID H. PINGREE
Secretary
A PARTY WHO IS ADVERSELY AFFECTED BY THIS FINAL ORDER IS ENTITLED TO JUDICIAL REVIEW WHICH SHALL BE INSTITUTED BY FILING ONE COPY OF A NOTICE OF APPEAL WITH THE AGENCY CLERK OF HRS, AND A SECOND COPY, ALONG WITH FILING FEE AS PRESCRIBED
BY LAW, WITH THE DISTRICT COURT OF APPEAL IN THE APPELLATE DISTRICT WHERE THE AGENCY MAINTAINS ITS HEADQUARTERS OR WHERE A PARTY RESIDES. REVIEW PROCEEDINGS SHALL BE CONDUCTED IN ACCORDANCE WITH THE FLORIDA APPELLATE RULES. THE NOTICE OF APPEAL MUST BE FILED WITHIN 30 DAYS OF RENDITION OF THE ORDER TO BE REVIEWED.
Copies furnished to:
John Gilroy, Esquire Cynthia S. Tunnicliff, Esquire
Department of HRS Carlton, Fields, Ward, Emmanuel, 1321 Winewood Blvd. Smith & Cutler, P. A.
Building 1, Room 407 P. O. Drawer 190
Tallahassee, Florida 32302
Yenneth G. Ortel, Esquire
Oertel and Hoffman Glen A. Reed, Esquire
Suite C Richard L. Shackelford, Esquire 2700 Blair Stone Road Bondurant, Miller, Hishon & Tallahassee, Florida 32301 Stephenson
2200 First Atlanta Tower
Eric B. Tilton, Esquire Atlanta, GA 30383
P. O. Box 5286 Tallahassee, Florida 32314
Morgaln L. Staines
2204 East Fourth Street Santa Ana, CA 92705
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that a copy of the foregoing was sent to the above-named people by U.S. Mail, at 3:30 p.m. o'clock, this 5th day of December 1985.
LESLEY MENDELSON, Agency Clerk Assistant General Counsel Department of Health and
Rehabilitative Services 1323 Winewood Blvd.
Building One, Suite 407 Tallahassee, Florida 32301 904/488-2381
| Issue Date | Proceedings |
|---|---|
| Aug. 16, 1985 | Recommended Order (hearing held , 2013). CASE CLOSED. |
| Issue Date | Document | Summary |
|---|---|---|
| Nov. 25, 1985 | Agency Final Order | |
| Aug. 16, 1985 | Recommended Order | Application for Certificate Of Need for 60-bed psychiatric hospital should be denied for failure of proposed facility to comply with several rule criteria. |
